At the Center

What Has Happened to the Poor?

Thursday, Nov. 8, 2012

In all the debate about the middle class and the rich in the recent election, very little attention was paid to those at the bottom of the income ladder in the United States. John Ifcher, assistant professor of economics at SCU, talked with the Ethics Center's Emerging Issues Group this week about how low income Americans are faring.

First, Ifcher reviewed the Clinton-era welfare reform, known as the Personal Responsibility and Work Opportunity Act of 1996. That piece of legislation made work a requirement for receiving assistance and sanctioned recipients who did not meet the requirement. It also put a five-year lifetime limit on access to government assistance.

Ifcher summarized the results: "These reforms came out of a period of growing caseloads, and they indisputably cut caseloads by about half. The percentage of single mothers working went from the high 60s to the low 80s. The best evidence is that the reforms didn't really have positive or negative effect on the income or consumption of people who went from welfare to work, but there is some evidence that they did increase the subjective well-being of former recipients. Economists generally model work as a negative thing, but happiness research says the opposite, that people get a lot of meaning and value from their work, so that may be why subjective well-being improved."

Have these improvements lasted through the Great Recession? Ifcher said it's still too early to make firm conclusions. "Anecdotal evidence suggests it's harder for people to get on welfare than it used to be. The rolls have not grown substantially, as they did in previous periods of recession, but the number of food stamp recipients has gone up. We know that the poverty rate has gone up from about 12.5 to about 15 percent. During this recession, as in other recessions, all the vulnerable populations were most likely to lose their jobs—young people, people of color."

Ifcher has started a research project to look at the subjective well-being of single mothers during the recession, a complement to his 2008 research on " “The Happiness of Single Mothers After Welfare Reform.”

"We're at a really challenging time," he said. "I'm definitely worried about the safety net."